Corpus ID: 237513889

Tests of Bayesian Rationality

  title={Tests of Bayesian Rationality},
  author={Pooya Molavi},
What are the testable restrictions imposed on the dynamics of an agent’s belief by the hypothesis of Bayesian rationality, which do not rely on the additional assumption that the agent has an objectively correct prior? In this paper, I argue that there are essentially no such restrictions. I consider an agent who chooses a sequence of actions and an econometrician who observes the agent’s actions but not her signals and is interested in testing the hypothesis that the agent is Bayesian. I argue… Expand


Berk-Nash Equilibrium: A Framework for Modeling Agents with Misspecified Models
An equilibrium framework that relaxes the standard assumption that people have a correctly-specified view of their environment and introduces the notion of a Berk-Nash equilibrium, where each player follows a strategy that is optimal given her belief, and her belief is restricted to be the best fit among the set of beliefs she considers possible. Expand
Dynamically Consistent Beliefs Must Be Bayesian
Abstract Experimental evidence such as the Ellsberg Paradox contradicts the Savage model of decision making under uncertainty, since the representation of beliefs underlying preferces by a singleExpand
Active learning with a misspecified prior
This work provides a complete characterization of asymptotic actions and beliefs when the agent's subjective state space is a doubleton and shows that in a misspecified environment a myopicAgent's beliefs converge while a sufficiently patient agent's beliefs do not. Expand
Equilibrium in Misspecified Markov Decision Processes
We study Markov decision problems where the agent does not know the transition probability function mapping current states and actions to future states. The agent has a prior belief over a set ofExpand
A Theory of Non‐Bayesian Social Learning
The results illustrate that, in the presence of imperfect recall, long†run aggregation of information is closely linked to the rate at which agents discount their neighbors' information over time, the curvature of agents' social learning rules, and whether their initial tendencies are amplified or moderated as a result of social interactions. Expand
Misinterpreting Others and the Fragility of Social Learning
We study to what extent information aggregation in social learning environments is robust to slight misperceptions of others’ characteristics (e.g., tastes or risk attitudes). We consider aExpand
Limit Points of Endogenous Misspecified Learning
We study how an agent learns from endogenous data when their prior belief is misspecified. We show that only uniform Berk–Nash equilibria can be long‐run outcomes, and that all uniformly strictExpand
Experiments on Decisions under Uncertainty: A Theoretical Framework
The analysis of lab data entails a joint test of the underlying theory and of subjects' conjectures regarding the experimental design itself, how subjects frame the experiment. We provide aExpand
First Impressions Matter: A Model of Confirmatory Bias
Psychological research indicates that people have a cognitive bias that leads them to misinterpret new information as supporting previously held hypotheses. We model such confirmatory bias in aExpand
Non-Bayesian Learning
A series of experiments suggest that, compared to the Bayesian benchmark, people may either underreact or overreact to new information, and shows a basic distinction between the long-run beliefs of agents who underreact to information and agents who over react to information. Expand